4.2.2 - Assessing a Country as a Market Flashcards
5 factors to consider when assessing a Country as a Market
- Ease of doing business
- Infrastructure
- Levels and growth of disposable income
- Exchange rates
- Political stability
How does disposable income impact sales?
Higher disposable income = More sales
Lower disposable income = Slower sales
What is disposable income?
Income individuals have left after paying direct taxes and other contributions
What is ease of doing business?
Rules and regulations involved in establishing a business in a particular market may be relatively simple or extraordinarily hard
Examples of factors impacting the ease of doing business?
- Accessing credit
- Registering properties
- Language/cultures
- Tariffs/Quotas
Impact of a country having low ease of doing business?
If businesses face significant challenges setting up a business, this may lead to delays in operations and the business generating sales
What is Infrastructure?
Infrastructure considers factors such as roads, transportation and communication (mobile coverage/internet)
Impact of poor infastructure
- Delays in reaching consumers
- Expensive to fix issues
- Decreases consumer satisfaction and sales
What does political instability mean?
Business is at risk from unpredictable changes in policies
What could political instability impact?
- People’s employment
- Disposable income levels
- Business regulations
What are exchange rates?
An exchange rate is the price of one currency in terms of another, e.g. £1 = $1.10
How do exchange rates impact businesses?
Exporting to country with high exchange rates = Expensive so higher for consumers
Importing from high exchange rates = Cheaper imports
